BBVA API Market
Today, APIs are not a mere extra in the business world; they have become an essential part of the day-to-day operations of any company, large or small. More and more companies are using third party solutions to manage their activity and, of course, to help bring down business costs.
This process has been accelerated by the opening-up of the banking infrastructure to third parties. Thanks to open banking and PSD2 regulation at European level, there are now many ways of having a cheaper, safer and higher quality service.
Open banking has put the customer at the heart of the banking business. It is a new open ecosystem in which banks and fintech go hand in hand: the former, opening up their APIs so that any developer can use them, and the latter, launching applications that fit the needs of each business with these tools.
This new technological paradigm, based on regulations such as PSD2 at European level, has helped to open up the banking industry, leading in turn to new players arriving on the scene, and, consequently, encouraging competition and collaboration between all parties.
This way, each of them can make better use of the strengths of the other to offer a better service to the consumer and, of course, at a lower cost, as spelled out in the World Fintech Report 2020 by Capgemini and EFMA.
None of this would be possible without APIs. With APIs, any third-party company can safely access banking information and services, and thus develop new, customized financial products that fit customer needs as closely as possible. This means fewer barriers to entry to the sector, encourages competition and, in turn, results in better and, of course, cheaper applications.
Until quite recently, applications that made use of banking information were designed and developed using complex tools for data extraction and processing such as screen scraping. This type of technique aims to access private or public data that is available on the web and can be distributed in open format, using various processes.
APIs make it easier to develop applications, as they are interfaces that include all the technical documentation necessary to connect to the bank and to improve the way the information is used. This means less time is taken to develop the app, adapting to each company’s real needs and also its costs.
APIs also offer enhanced security for protecting customer information. Unlike other techniques such as screen scraping, APIs are based on a native machine-to-machine dialog, applying more stringent privacy protocols through a strong authentication system, to prevent fraudulent transactions.
One of the key ways companies— especially smaller ones—can improve their performance is through automating part of their critical processes. Manual processing of such processes is very time-consuming, leads to human errors and is often much more expensive, as one or several employees are needed to carry them out.
Today, process automation is a key part of doing business. There are even technical names for this task: Business Process Automation (BPA) and Business Process Integration (BPI), business strategies that save on costs thanks to process automation and integration.
To a large extent, a good process automation strategy involves the proper development and integration of third-party applications. To meet this goal, APIs play a key role, both as a means of real-time information sharing and for developing applications that are used to prevent manual actions.
This is especially relevant for banking transactions, where the introduction of banking APIs will create new applications and services that can be integrated into business systems (ERP) and automate relevant processes.
According to Accenture’s survey “It’s Now Open Banking”, the most significant advantage of using an open banking platform for European SMEs is being able to access the most convenient and innovative banking services at any given time.
Thanks to the APIs, any external provider could develop a catalog of financial products and services used by various banks and entities. This catalog could also offer the conditions that best suit the needs of each company according to its activity.
In this way, any company could manage its finances in an open way and quickly move its information, data and reserves between different offers, always being able to choose the best option with total transparency. Obviously, the better conditions a product has and the more it meets the needs of the business, the better it is for the company from an economic standpoint
Banking information, combined with the appropriate analytical tools, can provide an adequate response to some of the main concerns of the SMEs’ cash position, such as forecasting their cash flows, managing their liquidity, solvency level, rating for the financing application, etc.
This is one of the strong points of the Account Information Service (AIS). This type of service collects and displays the information of all the user’s bank accounts on a single platform through dedicated APIs. It gives companies an overview of their financial situation so they can easily analyze their expenses and financial needs.
In fact, these aggregation services also provide the basic information used for a new cash flow consulting and advisory service which meets the needs of each business, is as automated as possible, provides real-time information and, of course, is designed to reduce companies’ operating costs.
In short, digitalization has become an essential task for companies, especially the smallest ones. This process is especially relevant when it comes to reducing business costs, and APIs play (and will play) a key role in this transformation, especially from the standpoint of banking transactions.
PRETA is one of the leading bodies in the European Union in terms of intra-Community payments and financial transactions. Following the implementation of PSD2, the body has focused its efforts on ensuring compliance by providing a number of services and documentation that suppliers need.
Confirmation of funds is a service regulated by the PSD2 Directive intended to find out whether a certain customer has enough funds in their bank account when making a charge using their credit card.
The PSD2 Directive has boosted the use of APIs that improve the security and automation conditions with which payments are executed, such as BBVA Accounts PSD2, Funds Confirmation PSD2 and Payments PSD2.